Dr Anita Leung Fung Yee, CEO of QJY, is delighted to announce the acquisition of the exclusive advertising agency rights of six ground TV channels and one satellite TV channel within such a short period of time, enabling the business scale of the Group’s advertising platform to be equivalent to that of any provincial TV station in Mainland China. From 2008, the TV advertising expenditure managed by QJY will exceed RMB 5 billion, leading QJY to become one of the top 15 TV advertising platforms in China. Excluding CCTV, the TV ad-spend capacity managed by QJY ranks just after the provincial TV stations in Shanghai, Guangdong, Beijing, Hunan, Chongqing, Zhejiang, Shandong, Jiangsu, Tianjin, Fujian, Hebei, Shannxi, Henan and Liaoning. It is predicted that the advertising expenditure controlled by the highest-ranking provincial TV station will be up to RMB 21.2 billion in 2008.
Dr. Leung adds that QJY establishes its TV advertising platform in Mainland China on three principles:
I. QJY will not pay a high premium for acquiring the exclusive advertising agency rights of a TV channel, on the basis of advertising revenues achieved by the targeted channel in the previous year. QJY’s competitive edge comes with the efforts by the professional and international advertising team, who work on improvements of TV advertising packaging, the enhancement of customers’ image and PR proceeds, the promotion of TV programming, the procurement of international advertisers and the provocation of interaction among TV stations, their audience and artists. All these advantages have worked to put QJY in a competitive position in concluding similar deals.
II. QJY first set its acquisition targets on ground TV channels. After gaining experience from operating the advertising rights of the ground channels and having posted profits, QJY then set sights on satellite TV channels. The acquisitions will be focused on “Drama & Entertainment” channels, whether it be ground or satellite. QJY’s business rollout envisages the company becoming one of the top 10 TV advertising platforms in China by the end of 2008.
III. At the same time, the company’s collaboration with the nine major Mainland TV stations in the production of TV drama series has enriched QJY’s library. At present, there are around 2,000 episodes of TV dramas in the film library, allowing the TV channels on QJY’s advertising platform to select and adopt in order to enhance viewing rates. The Drama Channel of Hubei TV Station has become the ground channel with the best viewing rate since the Group acquired its exclusive advertising rights in 2007.
Dr. Leung has indicated that, through the cooperation with long-term strategic partner Tianjin Qin Jia Yuan Advertising Company Limited, the Group succeeds in acquiring 51% of the rights to Southern TV Satellite under favourable terms and conditions. According to the agreement, QJY has a first right to buy the remaining 49% of the rights in the coming two years for a consideration based on the P/E ratio and the operating results generated by the rights at the time of acquisition. This arrangement provides the Group with optimal flexibility to acquire the 49% stake based on the actual contribution from such rights. It will not only favour the Group’s cash flow position and ensure stable growth, but also help to push ahead the schedule of expanding its TV ad-spend capacity to RMB 9 to 10 billion by the end of 2008, ranking the company among the top 10 advertising platforms in China.
Mr. Bernard Yiu, who joined the Group in mid 2007 and was appointed as the CEO of Qin Jia Yuan (China) Advertising Company Limited and the Executive Director of the Group, has full confidence in the business of the QJY TV advertising platform. He announces that QJY has already achieved 40% of the 2008 advertising revenue target before the Chinese New Year. He adds that the Southern TV Satellite has an invaluable market advantage of nationwide and even global coverage. QJY will spare no effort to replan and design the advertising packaging in order to stimulate an increase in ad-spend capacity to more than RMB 1.1 billion. Southern TV Satellite has a wide coverage including North America, Asia, Mexico, Central America, South America, Macao and Hong Kong. In Hong Kong, the channel has audiences of 0.51 million and 0.12 million respectively, through the networks of the PCCW Limited and Hong Kong Broadband Network Ltd.
The advertising business of Southern TV Satellite will be a milestone in QJY Media’s development. Dr. Leung is confident that QJY’s advertising team can fully leverage their competitive edge to not only launching advertising packages with local and overseas exposure, tbut also organize large-scale PR activities inside and outside China to enhance audience ratings and participation. This will enable QJY to better service its local and overseas advertisers.
About Qin Jia Yuan
Qin Jia Yuan Media Services Company Limited (HKEx: 2366) is a China-focused one-stop shop for TV media services, providing integrated programme, distribution, advertising and marketing and public relations services to production houses, advertising agencies and advertisers. The Group was listed on the main board of the Stock Exchange of Hong Kong on June 30, 2004 following a successful initial public offering. Its strategic shareholders include Aegis Group plc, a public company listed on the London Stock Exchange and one of the world’s five largest media groups.